Depreciation allowed though invoices were in name of husband of assessee

Depreciation allowed where invoices for the fixed assets were in the name of husband of the assessee but payment made by the assessee/debited to her account

In a recent judgment, ITAT Allahabad has allowed the depreciation where invoices for the fixed assets were in the name of husband of the assessee or husband’s proprietorship firm but payments were made by the bank account of the proprietor or by the husband who debited assessee’s account in books.

ABCAUS Case Law Citation:
4483 (2025) (03) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC) in sustaining disallowance of depreciation.

The assessee was a Proprietorship firm named as M/s Umang. The case of the assessee was selected for scrutiny through CASS. The Assessing Officer (AO) passed the assessment order under section 143(3) of the Income Tax Act, 1961 (the Act) inter alia making a disallowance for part of the depreciation claimed by the assessee.

The CIT(A) sustained the disallowance of the depreciation observing that the copies of invoices towards the purchase of the fixed assets were in the name of M/s Umang Sarees and in the name of Proprietor, which were also paid by the assessee, claiming the said payment to be the expenditure incurred for business expansion of appellant. The CIT(A) approved the view adopted by the Assessing Officer that the contention of the appellant cannot be accepted as the bills of addition to fixed assets were clearly in different names therefore the same cannot be accepted to be used for business expansion of the appellant.

Before the Tribunal the assessee contended that Mr. Umang Grover is the name of the husband of the assessee and assessee’s firm name is “M/s Umang”.  Since the assessee’s husband was fully involved in setting up the new venture and purchasing of material, most of the suppliers have inadvertently mentioned the title of her husband along with the name of the firm i.e. Grover or his firms name M/s Umang Sarees.  

The Revenue submitted that in the assessment proceedings before the Assessing Officer, the assessee submitted merely PANs, confirmation letters and account statements of all creditors as per her books of account without anything more to discharge her burden

The Tribunal observed that as contended Mr. Umang Grover was husband of the assessee and assessee’s firm name was M/s Umang.  Since the assessee’s husband was fully involved in setting up the new venture and purchasing of material, most of the suppliers of furniture and fixtures and electrical appliances had mentioned the title of her husband along with the name of the firm i.e. Grover or his firms name M/s Umang Sarees. 

The Tribunal observed that payments of all the bills towards purchase of fixed assets had been made from the bank account of the assessee.  Though the invoices were either in the name of his husband or in the name of firm of his husband but all the payments had been made either from the bank account of the assessee or by husband by debiting to account of the assessee. 

In view of the above, the Tribunal opined that CIT(A) had erred in not allowing the depreciation as claimed by the assessee.  

Accordingly, the ground of the assessee was allowed. 

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